Southern California -- this just in

The state today took a $56.5-million bid by a private real estate group wanting to purchase the Orange County Fairgrounds, an early test of Gov. Arnold Schwarzenegger's effort to sell state properties to cut the budget gap.

After an auction that lasted less than a minute, Craig Realty Group had the top bid. [Note: An earlier version of this post said the state accepted Craig Realty's bid and the headline said Craig Realty "buys" the fairgrounds. The state is still evaluating all the bids.]

“We see this as an interesting opportunity to enhance something that’s here,” said Steven Craig, president and chief executive of Craig Realty, a commercial real estate firm in Newport Beach. “I’m happy to keep the fair here. We like it that way. But we’d like to find a way to make it financially viable. Maybe a private enterprise approach will work.”

[Updated at 11:24 a.m.:
Erin Shaw, a spokeswoman with the state Consumer Services Agency, said the state has taken seven bids under submission, with Craig Realty
filing the highest bid at $56.5 million. She said state officials will
now do an analysis to determine which bid will be the most financially
beneficial for the state. Shaw it could be several weeks before a
decision is reached. “We may execute a contract by the spring,” she
said.

The top bid was significantly lower than what officials believed the property was worth.]

This morning, officials from the California Department of General Services opened envelopes with starting bids on the 150-acre property, which ranged from $1,000 from Tel Phil Inc. to $55 million from Facilities Management West.

Other initial offers included $17 million from Advanced Real Estate Services, $20 million from Anaheim Sports Holding, $42.5 million from Craig Realty Group and $2 million from the consulting firm Forde & Mollrich.

Orange County and the city of Costa Mesa were the only public entities that bid; their partnership offered $6.5 million.

Representatives for the seven bidders gathered inside a small meeting room in the fairground administration building in Costa Mesa for the 10 a.m. proceeding expected to last 45 minutes, despite heavy opposition from local politicians and activists.

The opposition to the auction doesn't bode well for the proposed sale of
such high-profile properties as the Los Angeles Memorial Coliseum, Del
Mar racetrack and San Quentin State Prison.

The Cow Palace in Daly City, fairgrounds in Ventura and San Diego and
even the site of the state fair in Sacramento were also listed in the
governor's May budget proposal as properties the state might unload.
The sales were supposed to raise $600 million to $1 billion for the
general fund. But legislators balked at most of them, agreeing only to
sell the Orange County Fairgrounds, a parcel that includes a
concert amphitheater, exhibition halls and an outdoor swap meet.